A slate of contracts to provide cloud computing services to the Interior Department could add up to $10 billion and help the department save $100 million in information technology costs annually, officials have said.

Interior initially awarded the contracts for cloud storage, secure file transferring, virtual machine operations and Web and database hosting in May. The awards went to 10 companies including Verizon, AT&T and IBM. Interior Chief Information Officer Bernard Mazer has described the contract as a “one-stop shop for all [Interior’s] outside, contractor-supplied hosting.”

The contracts are all indefinite delivery-indefinite quantity -- or IDIQ -- contracts, meaning the 10 vendors will compete with each other to win 10 specific contracts to provide cloud goods and services, Interior said in the statement Wednesday. Each of those contracts has a maximum value of $1 billion for a total possible value of $10 billion for the entire slate of contracts.

Cloud storage is typically cheaper than on-site data center storage because vendors can pack information more tightly and charge for storage space like a utility, with customers only paying for the storage they use.

The comptroller general’s office cleared the way for the Interior contract award in March, when it denied a protest from technology vendor Qwest Government Services. Qwest argued the goods and services described in the June 2012 solicitation were too vague and that the terms of the proposed contracts imposed too much risk on vendors.

The comptroller general’s office found Interior had provided adequate information for vendors to compete for the contracts and that the agency was under no obligation to ensure its eventual contracts limited risk for vendors.

A separate $35 million contract to move Interior to a cloud email system was delayed for more than a year by a legal squabble between vendors representing Google and Microsoft systems. The contract for 90,000 email users ultimately went to Onix Networking, which offers the Google Apps for Government system.

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